Worldwide fertilizer demand expanding

CHS is the nation’s largest cooperative marketer of grain and a leading wholesaler of crop nutrients that does business worldwide. As such, the company has insight into commodity markets around the world.

Recently, Timothy Chrislip, CHS director of product management and business development, spoke with Delta Farm Press about the fertilizer market and how producers can help suppliers keep nutrients from running short. Among his comments:

A general market update…

“On the fertilizer side, the markets continue to be strong. The global agriculture market has good commodity prices. So European countries, India, China and others are bidding against us for fertilizer products. That’s pushing prices up as anticipated demand outstrips supply.”

Should farmers be watching for more steep rises in fertilizer prices?

“It’s really hard to call. There has been a $75-per-ton increase in phosphates over the last 10 days (since Jan. 4). That was led by a huge increase in sulfur prices that is used to make phosphates.

“The price of ammonia — used in the production of DAP and MAP — is also going up.

“I expect prices to continue moving up. I don’t expect any huge increases in the near term, but the latest increases haven’t been felt by the growers yet.”

Are you finding it difficult to even find product?

“There is a problem with potash. We’re flat short and probably will be through May.

“There’s a host of reasons for that. One of the big ones: last summer a large Russian potash mine — responsible for about 1.2 million tons per year — flooded and is no longer operational. Potash is very tight given the increased demand drive by strong commodity prices.

“Until Canadians bring more production on line over the next two or three years, potash will remain very tight. In some cases, there simply won’t be enough available.

“With phosphates and nitrogen, we should be able to find enough. The real question with both is will the grower and dealer make commitments early enough to get it in the right location?

“One of the challenges we have is growers often want to wait until February or March to decide how much corn versus beans versus rice to plant. The longer a grower waits to make that call, the more difficult it is for us to get product in place to meet his needs.

“And prices are so high that dealers aren’t terribly anxious to take product in simply on a bet that area growers will plant more corn. The quicker and better the grower can communicate with the dealer about planting intentions, the better we’ll be able to set up supply when they need it.”

On growers helping suppliers…

“Growers need to make decisions earlier, if possible. We’re rapidly getting to point where if you wanted another cargo of Middle East urea, by the time it’s bought and shipping is finished, it could be 90 days.

“That’s the kind of lead-time involved in the process and shows why it’s vital for the dealers to know what the growers will need early. The dealer can then get to us and other suppliers and let us know what needs to be brought in.”